"Palm oil production in Malaysia, the second-biggest grower after Indonesia, may gain this year as an improvement in the weather after excessive rain aids yields, an industry group said, forecasting lower prices. Futures plunged.

Output may be 17.6 million metric tons compared with 17 million in 2010, Yusof Basiron, chief executive officer of the Malaysian Palm Oil Council, said in an interview yesterday. That would match production in 2009 and compare with 2008’s record of 17.7 million tons, according to official data.Increased supplies and lower prices may help cool global food costs that reached a record in January according to the United Nations’ World Food Price Index. Palm oil has rallied 30 percent in the past year as floods hurt harvests in Indonesia and Malaysia. Soybeans, crushed to make a rival oil, have jumped 36 percent, tracking advances in wheat, corn and sugar".